51% of policyholders are underinsured: Apollo Munich Health Insurance report

 MUMBAI: Almost half of health insurance policyholders in India are underinsured, finds a study by Apollo Munich. What this means is that they have purchased low sum insured health insurance policies, which is not sufficient to take care of their medical emergencies.

“On the one hand India faces a challenge of lack of health insurance penetration, on the other hand those who have health insurance are underinsured,” said Antony Jacob, CEO Apollo Munich Health Insurance. “People must understand that health insurance is not just a tax saving tool, and therefore be mindful while choosing a sum insured for themselves and their family.”

The standalone health insurer studied around 7 lakh policyholders spread across 82 cities in India, and has found that both men and women across metros, tier 1 and 2 cities and towns are underinsured. At 52% men are more underinsured than women at 46%.

Health insurance is one of the fastest growing segment but the insurance amount is not sufficient as there is lack of awareness about the amount of sum insured, over dependence on corporate health insurance coverage, willingness to pay a premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc, the report said.

Also, underinsurance is more prevalent in higher age brackets as 62% of policyholders above 45 years of age are underinsured. The slight respite to this grave problem is that young people seem to be choosing the right sum insured comparatively, since at 38% people between 18-35 years are the least underinsured segment amongst all other age groups. The underinsurance percentage of people between 61-65 years is 75%. One of the main reasons for this alarming underinsurance statistic is that policyholders do not upgrade their sum insured on the basis of their increasing age, changing needs and medical inflation.

The maximum number of underinsured people 59% is in South while North, West, East and Central parts of the country is 49%, 49%, 48% and 45% respectively.